Oil sinks to lowest since November amid glut woes

Oil plunges to lowest since November

Oil prices extended overnight losses in North American trading on Thursday, sliding to the lowest level since November amid growing fears over a global supply glut.

The U.S. West Texas Intermediate crude June contract lost 99 cents, or around 2%, to $46.84 a barrel by 8:10AM ET (12:10GMT), after touching its weakest level since November 30 at $46.77 earlier.

Elsewhere, Brent oil for July delivery on the ICE Futures Exchange in London dropped $1.01 to $49.78 a barrel, after falling to a more than five-month low of $49.72.

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Crude has been under pressure in recent weeks amid fears that an ongoing rebound in U.S. shale production is derailing efforts by other major producers to rebalance global oil supply and demand.

The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 930,000 barrels in the week ended April 28, a much smaller draw than expected.

The report also showed that gasoline inventories increased by 191,000 barrels, as refiners produced more fuel than the market could consume.

U.S. drillers last week added rigs for the 15th week in a row, reaching the highest level since August 2015. The relentless increase in U.S. output has overshadowed pledged output cuts by major producers.

In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day between January and June, but so far the move has had little impact on inventory levels.

A final decision on whether or not to extend the deal beyond June will be taken by the oil cartel on May 25.

Elsewhere on Nymex, gasoline futures for June declined 2.4 cents, or nearly 1.6%, to $1.498 a gallon, while June heating oil slumped 2.5 cents to $1.447 a gallon.

Natural gas futures for June delivery held steady at around $3.23 per million British thermal units, as traders looked ahead to weekly storage data due later in the global day.

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